Are Bad Managers Holding Back Your Best Talent?

A few years ago I joined a large organization in the U.S. Possibly because I was the last one in, I was allocated the worst secretarial assistance I have had in my entire life.

I spent a considerable amount of time trying to figure out what I could entrust her with that would not play havoc with my work. A colleague I confided in gave me some surprising advice: “Her performance review is coming up. Give her the highest possible rating.”

“Why would I do that?” I asked naively.

“It’s the fastest way to get her invited to work in another division,” she said almost gleefully.

I am ashamed to admit it, but I followed her advice and, sure enough, the secretary was snatched up by a manager in another division. Evidently this kind of dysfunctional behavior is not uncommon; in Brazil there is even a term for it, “people trafficking.”

And it’s far from the only system-gaming that goes on in the strange world of performance reviews. A CEO I know noticed that managers often gave employees average ratings but later requested raises for the same employees. He eventually discovered that they were doing the opposite of what I’d done: giving valuable employees a low rating so that they didn’t get picked off.

This kind of behavior can badly hurt the company. All those low-ranked but highly valued employees were at risk of jumping to a competitor, of course, just as my incompetent secretary was moved around the company instead of being removed completely, as she should have been.

Those questions should definitely help managers develop ownership of their decisions and consequences. I applaud these changes.

But I’d like to raise another question, for companies that aren’t quite ready to throw out their performance review processes. If performance management systems are so often reviled, ignored, or gamed, do we really know how well we’re managing talent? How many good people are being held back by bad managers?

It may be many more than we would like to admit. At some organizations, including Samba Schools, people who are displeased with a manager may drift to another wing within the organization. Migrations like those would be clear signals that something is wrong with that division’s manager. But for this to be detected, people must be free to choose whom to work with. Moreover, managers must be rewarded for smart talent management and punished for the reverse. At present, in most organizations I know of, managers who make their numbers aren’t held accountable for talent management, and people can only show their dissatisfaction with a manager by leaving the organization.

It’s high time for CEOs – as well as business school professors and consultants – to insist that managers be held accountable if they abuse performance-management systems (as imperfect as those systems may be). They must be rewarded for using the system to recognize and retain future leaders, and to send incompetent employees on their way.